Exam 13: The Costs of Production

Scenario 13-11 Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. -Refer to Scenario 13-11. The implicit cost for one birdhouse is

Which is greater -- economic profit or accounting profit?

Jamar used to work as an office manager, earning $40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up is counted as part of the life-coaching business's

Scenario 13-11 Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. -Refer to Scenario 13-11. An accountant would calculate the total cost for one birdhouse to be

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

The production function depicts a relationship between which two variables? Also, draw a production function that exhibits diminishing marginal product.

The typical total-cost curve is U-shaped.

Economists and accountants both include forgone income as a cost to a small business owner.

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Implicit costs are costs that do not require an outlay of money by the firm.

Figure 13-3 -Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve?

Table 13-20 Listed in the table are the long-run total costs for three different firms. -Refer to Table 13-20. Firm B is experiencing diseconomies of scale.

If long-run average total cost is rising, then the firm is experiencing economies of scale.

Suppose a firm currently produces 325 units of output per day with 15 workers. The firm is able to produce 340 units of output with a 16th worker. What is the marginal product of the 16th worker?

Suppose that a firm's long­run average total costs of producing an individual income tax return is $75 when it produces 1,000 returns and $75 when it produces 1,200 returns. For this range of output, the firm is experiencing

Carol Anne makes candles. If she charges $20 for each candle, her total revenue will be

In the short run, if a firm produces nothing, total costs are zero.

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152). Then the marginal product of the 6th worker is

Which of the following statements is not correct?

Which of the following expressions is correct?